Notable figures in the XRP community have engaged in intense debate about the role of Ripple’s On-Demand Liquidity (now Ripple Payments) in propelling XRP’s market value.

Ripple ODL Cannot Help XRP Price Grow

Renowned crypto author Panos Mekras has asserted that Ripple’s XRP-based solution for cross-border payment solutions, no matter how successful, will not inherently impact the price of XRP. Mekras argues that Ripple’s ODL is engineered to be demand-neutral.

He highlighted that ODL transactions primarily involve instant buying and selling of XRP, with no inherent demand for XRP originating from ODL itself.

When I said that a while ago, I was attacked by some people purely for telling the truth. Now that Ripple says it and has confirmed it, what?

As a reminder: Ripple's use case and cross-border payment solution for XRP, no matter how successful (and I hope it is because it's a… https://t.co/yWu9KAOU9X

— Panos 🔼{X} (@panosmek) March 30, 2024

Notably, this assertion is supported by a document from Ripple for SEC. In the paper, the payment firm explicitly states that most ODL transactions are demand-neutral, thus exerting no influence on the price of XRP.

Furthermore, Mekras underscored the presence of negative demand with Ripple’s payment solution. He noted that most XRP utilized for ODL originates directly from Ripple’s escrow. He believes the influx of XRP bolsters selling pressure as it introduces “new” XRP tokens into the market.

Consequently, Mekras emphasized that Ripple’s payment solution alone for cross-border transactions cannot increase the price of XRP.

Community Member Disagrees

On the other hand, pro-XRP X user Nietzbux finds Mekras’ view concerning. First, Nietzbux highlighted the necessity of a highly liquid market and an ideally higher XRP price for the efficient functioning of ODL or any bridging product utilizing XRP. 

Notably, the idea is that XRP’s supply cannot accommodate multi-billion dollar transactions unless XRP is expensive.

Nietzbux observes that pundits like Mekras push the idea that the XRP community needs more developers to stimulate demand for XRP to elevate its price via various utilities. However, Nietzbux finds this logic absurd. 

According to him, it implies that Ripple is relying on the community to generate the needed demand and price increase for XRP.

To support his argument, Nietzbux cited a scenario in which a large bank may inquire about the feasibility of transferring $100 billion of value in three seconds using XRP.

Ripple’s purported response would be that it is waiting for the XRPL community to generate the demand to increase XRP’s price to make the transaction possible.

Can ODL raise the price of XRP?

I respect some of the very smart people who say ODL will never raise the price of XRP. But that argument relies on some logic that I have trouble accepting.

For ODL to work efficiently, or for any bridging product using XRP, you need highly…

— nietzbux (@nietzbux) March 30, 2024

In response, Mekras stressed that the perspective Nietzbux finds absurd is actually the reality. He pointed out that other community members, including Ripple’s Chief Technology Officer David Schwartz, have echoed similar sentiments numerous times.

Regarding the question of moving $100 billion with XRP via Ripple’s solution, Mekras noted that the right answer is that the liquidity for such a transaction to happen is absent.

Furthermore, Mekras prompted Nietzbux to contemplate why Ripple has not successfully onboarded any major banks for ODL or why the ODL volume remains relatively low compared to XRP’s total trading volume.

Ripple has unlocked 500 million XRP from escrow for the month of April amid increased scrutiny of its XRP sales by the XRP community.

The latest escrow execution, indexed by Whale Alert, occurred today at 02:51 (UTC), with the 500 million XRP valued at a whopping $314,874,965 ($314.87 million) at the time of the execution. 

🔓 🔓 🔓 🔓 🔓 🔓 🔓 🔓 🔓 🔓 500,000,000 #XRP (314,874,965 USD) unlocked from escrow at unknown wallethttps://t.co/mapKFQkS6k

— Whale Alert (@whale_alert) April 1, 2024

Notably, the Ripple address that received the tokens has not distributed or sold them off as of the time of this report, maintaining a balance of 500 million XRP. The wallet’s escrow balance has now depleted to 4.5 billion XRP tokens, with the next execution scheduled for May 1.

While Ripple typically unlocks 1 billion XRP from escrow every month, some months witness a deviation from this pattern. For instance, the blockchain payments firm only released 500 million XRP last month, but it persisted in its pattern of relocking 800 million tokens.

On-chain data confirms that another escrow execution attempt for March failed due to a missing reference object. Moreover, Ripple also unlocked only 600 million XRP from escrow on Feb. 1. However, in an exciting twist, the firm completed the 1 billion quota much later in the month, on Feb. 25.

Throughout this year, January is the only month that has recorded Ripple’s characteristic escrow unlock pattern. The firm releases 1 billion tokens on the first day of the month and relocks 800 million XRP shortly after the escrow execution.

It remains to be seen if the blockchain company will release an additional 500 million XRP for April, mirroring the February pattern. Nonetheless, at the reporting time, only 500 million tokens have left escrow for this month. Following the latest execution, Ripple holds 39.5 billion XRP in escrow across eight wallets.

Ripple Escrow and XRP Sales Under Scrutiny

The escrowed assets are currently worth $24.7 billion, representing a significant portion of the XRP tokens in existence. Ripple’s substantial escrow holdings have taken center stage in recent times amid increased scrutiny of the company’s past and present XRP sales.

This increased scrutiny is a result of discoveries made from the SEC vs. Ripple lawsuit. Previously, information from past legal documents confirmed that Ripple leveraged bots from trading firm GSR to execute past XRP sales to institutions. 

This triggered speculation that Ripple’s sales suppressed XRP’s price. However, the Ripple CTO David Schwartz debunked these claims, confirming that the firm already ended these institutional sales. 

Most recently, the SEC made a demand for $2 billion in fines from Ripple for these past institutional sales. Speculation has emerged that the firm could sell off some of its escrowed XRP tokens to meet this demand if the judge rules in favor of the SEC. 

Meanwhile, Ripple’s CTO has persistently maintained that burning the escrow would not positively impact XRP’s price amid calls from community members. According to Schwartz, Ripple is looking to reduce its escrowed balance as quickly as possible, hence the XRP sales.

Crypto pundit Nietzbux recently explored the XRP price underperformance from two hypothetical scenarios relating to Ripple business operation.

In a detailed post on X, Nietzbux commented on the prevailing negative sentiment about XRP amid its underperformance in a bull market. He agreed that XRP’s current trajectory in this bullish cycle is disappointing. However, he highlighted potential positive and negative scenarios to provide insights into the state of the market.

Notably, Nietzbux speculated from the angle of Ripple’s business activities related to XRP. He argued that Ripple’s routine XRP sales constitute most of its business revenue. Additionally, he claimed that the utility Ripple has established for XRP plays a role in maintaining its price range between $0.50 and $0.60 during this bullish cycle.

Some thoughts on the low sentiment in XRP.

I understand the low sentiment. I am personally less than thrilled with where we are at. But logically, there are a couple of options to consider. One is the negative route and the other the positive.

What do we know? We know that…

— nietzbux (@nietzbux) March 28, 2024

Negative Scenario: Ripple Exists Only to Dump XRP

Taking these assertions into account, Nietzbux proposed a theoretical scenario in which Ripple’s sole purpose is to sell the XRP tokens from its escrow. In this scenario, he argued that XRP would have no substantial utility, no significant impact on the financial landscape, and no bank adoption.

Meanwhile, the commentator reflected on the potential entities to whom Ripple sells XRP. He highlighted possibilities such as institutions, venture capitalists, financial service firms, and potentially banks. 

He envisioned that these buyers merely secure juicy deals on XRP from Ripple and promptly sell it off for quick profits. In this portrayal, Nietzbux characterized Ripple as essentially a mechanism for selling XRP.

However, the commentator posed a critical question: “But does this make sense?” Nietzbux suggested it could only make sense for crypto critics who see the entire industry as corrupt. Explaining further, he attempted to compare Ripple with the collapsed FTX empire.

Likening Ripple to FTX

Nietzbux highlighted that FTX was run by a cohort of 10 young individuals, noting its fraudulent business could have been easily detected with minimal effort. Contrasting this, he emphasized that Ripple stands apart due to its extensive global presence, boasting 15 offices and a larger workforce compared to FTX. 

Furthermore, Nietzbux highlighted Ripple’s ongoing recruitment efforts and the establishment of new positions and divisions within the company. Moreover, he stressed that Ripple survived a nearly three-year investigation without facing criminal charges beyond failing to register some sales with the SEC. 

In contrast, FTX crumbled under the weight of initial rumors regarding its fraudulent activities, which ultimately proved true.

Essentially, Nietzbux sought to establish through this negative scenario that Ripple would make no efforts to expand and hire new employees, knowing it would not succeed at XRP adoption and utility.

For those who believe these actions could be a ploy to continue attracting investors to buy into a “dead coin,” Nietzbux acknowledges the plausibility. However, he countered this by highlighting that Ripple’s XRP buyers are institutions capable of conducting thorough due diligence with access to non-public documents. 

He stressed that these institutions would not deal with Ripple if it were merely an XRP-selling machine. Nietzbux left readers to contemplate the question: “If your goal is to empty the escrow and walk away, is that really the best way to do it?”

The Positive Scenario: Ripple Has Something to Hide

In exploring the positive scenario, Nietzbux considered Ripple’s actions beyond simply selling XRP. He emphasized Ripple’s extensive presence within major international organizations such as the IMF.

Nietzbux speculated that the company’s partners would play integral roles in any new financial system, whether SWIFT or other large next-generation platforms for settlement and foreign exchange. He emphasized that Ripple’s software would likely be incorporated into these systems in some capacity.

In this optimistic scenario, Nietzbux envisioned a situation where XRP’s utility would stem from integration with these forthcoming platforms. As a result, he suggested that selling XRP emerged as a viable strategy among the options Ripple could pursue to fund expansion and facilitate growth.

According to him, the rationale behind this expansion would be Ripple’s anticipation of continued growth. 

What It All Means

In essence, Nietzbux underscored the challenge of interpreting the actions of a company like Ripple. He highlighted the disillusionment experienced by many long-term XRP holders who have lost faith in both XRP and Ripple for justifiable reasons.

Nietzbux pointed out the anomaly of XRP’s performance compared to other cryptocurrencies that have achieved significant growth without positioning themselves as banking solutions. 

Emphatically, Nietzbux observed that the retail market appears to have lost interest in XRP, and widespread adoption has yet to materialize for crypto. He concluded that the key lies in what Ripple knows but chooses not to disclose to the public.

Nietzbux submitted:

“Do they know they are going to fail at their adoption goals and are simply keeping up appearances while dumping on retail? Or do they know adoption is coming and simply can’t say, hence, their continued hiring and expansion? Time will tell.”

Despite XRP underperforming the broader crypto market, its trajectory over the past year indicates that it remains a more favorable investment option compared to leaving money in a savings account.

Over the past day, XRP registered a 1.36% loss. However, this negative growth is not unique to XRP, as many other rivals witnessed a similar percentage decline. Yet, zooming out to a three-month timeframe reveals that XRP has remained stagnant, showing barely 1% growth.

Conversely, Bitcoin, Ethereum, BNB, Solana, and Dogecoin have all surged by over 50% within the last 90 days. This lackluster performance form XRP compared to its counterparts continues to breed discontent among its holders.

Meanwhile, some prominent figures in the XRP community have attempted to appease the growing pessimism. For instance, community investigator “Mr. Huber” recently took to X to disclose that XRP has outperformed the offerings of all savings accounts worldwide when considering its performance on a one-year scale.

XRP is up over 6% within a single year, it has outperformed every savings account of every bank in the world and yet you people are still crying about it. pic.twitter.com/GGxVPJfudU

— Mr. Huber🔥🦅🔥 (@Leerzeit) March 29, 2024

XRP Beats Bank Savings Account Offering

Significantly, within the past 365 days, XRP hit a low of $0.4218 before surging to $0.93 in July. This price top was due to a favorable outcome in the Ripple vs. SEC lawsuit. 

Meanwhile, XRP traded at $0.5159 precisely on March 29, 2023, precisely a year ago. With its current value of $0.615, the asset has appreciated by 19% over the past year. This percentage gain is more than three times the highest returns offered by savings accounts. 

According to a recent report by Business Insider, the average Annual Percentage Yield (APY) for traditional savings accounts in the U.S. ranges from 0.01% to 0.25%. 

However, online banks like UFB Direct, CIT Bank, and Capital One 360 offer higher APYs, up to 5.35%. Yet, this figure is dwarfed by the gains from holding XRP over the past year.

Ultimately, XRP community investigator Mr. Huber brought this analogy to establish that while XRP may currently be underperforming the rest of the crypto market, it constitutes a better holding than merely keeping cash in savings accounts.